G900 Experimental Classification and Rate Filings

G910 Negotiated Service Agreements

G912Capital One Services, Inc. NSA

G912 describes the Capital One Services, Inc. negotiated
service agreement (NSA) and explains the factors to be considered when
entering into comparable agreements with mailers.

1.0BASIC INFORMATION

The negotiated service agreement (NSA) that was the subject
of Docket MC2002-2 requires Capital One Services, Inc. (Capital One)
to receive electronic notification for undeliverable First-Class Mail
solicitations instead of physical return of the pieces. The notices
are to be provided through the Address Change Service (ACS) program
(see F030.2.0) and the usual electronic address
correction fee is to be waived. Capital One also agrees to maintain
and enhance address and mail preparation quality. In exchange for Capital
Ones receipt of the electronic notice for its First-Class Mail
solicitations and its compliance with the terms of the NSA, Capital
One would have available declining block rates of postage for volumes
above stated thresholds. A copy of the NSA is filed with the Postal
Rate Commission in Docket No. MC2002-2 as Attachment G to the Postal
Services Request for a Recommended Decision and can be found at
www.prc.gov.

2.0 FEATURES

2.1Requirements

To be considered comparable to the NSA in 1.0, a proposed NSA must have the following features:

a. Use of First-Class Mail for matter that qualifies
for Standard Mail rates.

b. Waiver of seal against postal inspection of mail
as agreed to by the mailer.

c. Computation of First-Class Mail postage by the use
of declining block rates specified in the NSA and based on particular
volume requirements that define incremental discount thresholds. The
mail subject to the NSA must relate only to the mailers products
and services.

d. Preparation of mail under applicable standards unless
otherwise specified in the NSA.

e. Adherence to the following address quality standards
for the rates claimed:

(1) Participation in Address Change Service (ACS) under
F030 using the endorsement Change
Service Requested as described in F010.5.1 for undeliverable-as-addressed
(UAA) mail.

(2) Use of National Change of Address (NCOA), FASTforward,
or other premailing USPS-approved method for meeting the move update
standards in E130 for Presorted First-Class Mail and
E140 for automation rate First-Class Mail.
In addition to those standards, addresses used on mailings must be updated
more frequently than 180 days or as required by the NSA.

f. Overall positive financial impact on the USPS. A
minimum payment or transactional penalty is required to ensure a positive
contribution.

g. Agreement to make necessary records and data available
to the USPS to facilitate and monitor compliance.

h. Ability of the USPS to cancel the NSA for any failure
or, where appropriate, material failure of the mailer:

(1) To provide accurate data.

(2) To present properly prepared and paid mailings.

(3) To comply with a material term of the NSA.

(4) To use the NSA.

2.2Candidate Factors

The following factors are considered by the USPS in evaluating
a proposal for a comparable NSA under G912:

a. Presentation by the mailer of at least 3 years of
historical data to document mail volumes (including UAA mail), mailing
systems and postage payment systems in use, and quality control procedures.
The effect on mail volumes of any corporate mergers, acquisitions, divestitures,
and similar events must also be provided.

b. Ability to make and present in an acceptable format
accurate forecasts of future mail volumes for USPS products and services
proposed for the NSA.

c. Ability to collect necessary data in an acceptable
format to support the NSA.

d. Willingness to establish and maintain an active Centralized
Automated Payment System (CAPS) for postage payment and to generate
records monitoring mail volumes and discounts.

e. Production of mail using an automated system to ensure
proper mail preparation and accurate postage calculations.

f. Implementation of a quality control program to ensure
proper mail preparation and to provide accurate documentation of mailings
and postage payment.

3.0 APPLICATION

3.1Initial Request

A mailer seeking to enter into an NSA with the USPS comparable
to the NSA under 1.0 must submit a written proposal, together with
appropriate supporting documentation, to the USPS manager of Pricing
Strategy (see G043 for address). The proposal must contain
a general statement of the reasons for requesting the NSA, and a summary
of the information addressing the elements of comparability described
in 2.1 and 2.2.

3.2Negotiations

As a result of the proposal, the mailer and the USPS may
negotiate a service agreement comparable to the NSA under 1.0, but with terms and conditions specific to
the mailer. To take effect as an experimental mail classification, the
comparable NSA must be recommended and approved pursuant to Chapter
36 of Title 39 of the United States Code, and the Postal Rate Commissions
rules of practice and procedure. A mailer may withdraw its proposal
for a comparable NSA at any time prior to agreement. Once concluded,
a comparable NSA is controlled by its terms and conditions. Nothing
in these regulations prohibits a mailer from seeking an NSA not comparable
to the NSA under 1.0.

3.3Determination Not to Conclude a Comparable
NSA

If negotiations between the mailer and the USPS end without
the parties reaching an agreement comparable to the NSA under 1.0, the mailer may request that the manager of
Pricing Strategy (see G043 for address) explain the determination
in writing. The mailer may ask for reconsideration of the decision to
end negotiations within 15 days from the receipt of the written explanation.
The request for reconsideration may include additional information and
reasons why negotiations for a comparable NSA should be resumed, and
should be submitted through the manager of Pricing Strategy to the Vice
President, Pricing and Classification (see G043 for address).